Experimentation: Winning experience in streaming
April 15, 2020
April 15, 2020
Along with the likes of Netflix, Hulu and Amazon, large traditional media companies, such as Walt Disney, WarnerMedia, and NBCUniversal, are bringing their own streaming services to market. The race is on.
So what’s going to secure pole position in this ever-more crowded field? There are clear limits to what consumers are prepared to pay out for subscriptions. Research suggests that most (60 percent) say $20 per month is their threshold, and 80 percent say no more than $40. So with those limits, most consumers will likely stick to just three to five services. And those that already subscribe to one of the e stablished brands such as Netflix or Hulu become increasingly attached to them as time goes by. New entrants that seek to dislodge those de facto incumbents and insert themselves into consumers’ affections face stiff competition. So how should they compete? Price and content will be important, of course.
But there’s another dimension that will prove highly influential: experience. Recent Accenture research found that among users of Netflix, Hulu and YouTube, 21 percent attribute “overall experience” as a top reason to leave a service, and 50 percent attribute “overall experience” as the top reason to stay.
What do we mean by experience? It’s much more than having technology that works or an appealing UI. Experience covers every interaction that a consumer has with a service or platform throughout their entire journey. From receiving promotional offers, signing up for the service and downloading the app, to navigating the platform, discovering and engaging with the content and dealing with customer service, each and every one of those moments presents an opportunity for a subscriber to love or hate their experience.
21%
of streaming users attribute “overall experience” as a top reason to leave a service
50%
of streaming users attribute “overall experience” as the top reason to stay
Accenture research has found that streaming services that provide simplicity and increasing relevance (or personalization) at each of those moments, score higher on subscriber affinity and ultimately retention, with 62 percent of customers switching when a streaming service lacks personal relevance.
Failure to commit to continuously enhance the user experience across the entire user journey can put companies way behind.
How can companies stay ahead in a world requiring continuous evolution? If they want to evolve and enhance their customer experience, and potentially outpace the incumbent players, new streaming services need to adopt a culture of experimentation. For a streaming service, experimentation means trying out new ideas to win on experience. How? By committing to continuous improvement fueled by a deliberate, data-driven method of testing experience enhancements with a subset of subscribers—across product, marketing and service— to identify the best features to roll-out across the entire subscriber base.
Like rocket fuel, it can accelerate the release of experience-enhancing features.
Experimentation can't reduce the time it takes to properly develop a new feature but it can validate success much earlier in the development cycle.
Experimentation injects the voice of the customer into employees’ daily decisions and guides product, marketing and customer service enhancements.
Experience can be a measure and aspiration that all departments can rally around as a shared KPI to which they all contribute.
Experimentation lends a more objective, data-driven approach to assessing enhancement investments.
Experimentation offers streaming services the best way to maximize the changes of developing and delivering a constantly refreshed and relevant experience that will keep consumers coming back for more. So how should those new to the concept get started?
Take a holistic view of the user journey on the platform, mapping the pain points, competitive deficiencies and opportunities for personalization.
A “value-driven engineering model” integrates business KPIs into platform enhancement decisions in order to maximize ROI and “velocity to value”.
Ideally the champion should clearly grasp the opportunity to use experimentation to better compete in a world of liquid expectations.
Review our report’s five key components and measure the extent to which they are valued today and ready to support scaling of experimentation volume.